Evaluation of Performance of Tourism Industry Companies listed in Istanbul Stock Exchange ( BIST ) by TOPSIS Methodology Erdal Yılmaz

To evaluate the operations of the companies in the past years and to make forecasts about the future, it is important to evaluate and analyze their financial performance. In this study, the financial performances of tourism enterprises operating in Istanbul Stock Exchange for 2013-2016 are compared with TOPSIS method. As a result of the research, it is determined that the best performances are observed in 2014, 2015 and 2016 for MALT and in 2013 for METUR.


Introduction
Tourism industry, which is an important sector of the economy, is increasing its importance day by day.Tourism sector produces economic units that aim to meet the needs by producing tourism services and to obtain the final profit.In order for tourism businesses to survive, continue their activities and reach their goals, it is very important to use this information that is obtained when evaluating, measuring and making future plans for financial performance.The evaluation of financial performance includes investors and lenders.Evaluation of financial performance also provides important information to decision makers such as managers in making past evaluations and planning for the future.
In this study, the financial performances of the tourism enterprises operating in the tourism sector, which has an important place in the Turkish economy and traded in the Istanbul Stock Exchange (BIST) are evaluated.The TOPSIS method, which is one of the Multiple Criteria Decision Making techniques is used in evaluating the financial performance.The TOPSIS method is an important method that helps to take decisions by choosing between multiple alternatives with converting a number of criteria to a single score on performance evaluation.In the analysis, various financial ratios were calculated on the basis of the financial statements of seven tourism companies traded in the BIST between 2013-2016 and the financial performances of the companies were compared by evaluating these ratios by TOPSIS method.

Literature Review
The evaluation of the financial performance of companies is a subject that has been studied in the literature.Programs such as ELECTRE and TOPSIS are used to evaluate and compare financial performances.There are other studies evaluating the financial performance of tourism companies as well.A summary of the literature on which company performance is assessed by TOPSIS method is presented in the table below.Fund performance evaluation generally uses traditional performance measurement techniques such as Sharpe ratio, M2 performance measure, Sortino ratio, Treynor index, T2 performance measure, Jensen index and Valuation Ratio.The TOPSIS method takes into account the comparison of multiple criteria and gives more meaningful results in the performance evaluation of stock pension mutual funds.Therefore; by using the TOPSIS method, a single performance criterion has been achieved in which traditional performance measures are evaluated together.In performance appraisal, the use of financial indicators prevents the making of subjective decisions.However, comparing financial results with each other can be problematic for the decision maker.Because, the usefulness of the methods can differ according to the expectations of the enterprises without performance evaluation.At this point, like the other multiple decision making methods, the TOPSIS method allows the decision maker to make a more objective assessment because it can combine different evaluation options into a common pavilion.As a result of the analysis, Federal Mogul İzmit Piston ve Pim Üretim Tesisleri A.Ş. is the company with the most stable financial performance among the companies in the sector.The financial performance scores of other companies for the 2000-2012 period and the resulting fluctuations in their rankings have been determined.Moreover, it can be said that the fragility caused by the 2008 crisis is at a lower level than the 2001 crisis.

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This study was run to evaluate whether the TOPSIS method can help in the presentation of a large number of financial data of the decision makers in the decision-making process.
As a result of the study, it has been concluded that the TOPSIS method scores are not capable of helping investment decisions for publicly traded companies.However, if the method is developed, it will be very helpful to the investor at the decision stage and will enter the literature as an important financial evaluation criterion.Through the TOPSIS method, multiple ratios were evaluated together, and the performance evaluation measure was reduced to a single coefficient, and general rankings were made between the enterprises.

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Erdal Yılmaz, Tunay Aslan Emerging Markets Journal | P a g e |11 This study was run to determine the financial performance of companies with TOPSIS method and to measure the relationship between these performance and financial ratios as well as returns of stocks.
There was no relationship between TOPSIS performance scores and stock returns.When we look at the relationship between financial ratios and stock returns, there is generally no correlation between variables in three out of four firms.Only statistically significant positive relationships were found between profitability ratios of an operator and market returns.The study results reveal that stock prices are mainly determined by external factors, especially in small businesses.For the weights of the criteria that were effective in the selection process of the accounting package program in the study, the consistency rate of the evaluations made with the AHP technique was examined and it was found that the results were reliable.Criteria with the highest importance were the ability to report and ease of use of menus, respectively.In the implementation section, the decision of the operator to renew the technology and increase capacity; the selection problem of the existing machine and the two CNC machines to be purchased were analyzed using the fuzzy TOPSIS method with valid cost analysis.
As a result, a common solution to the selection of the same machine was found in both methods.In this case, the fuzzy TOPSIS method can be used as an alternative to valid cost analysis in making management decisions.

Evaluation of Performance of Tourism Industry Companies listed in Istanbul Stock Exchange (BIST) by TOPSIS Methodology
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Purpose and Content
The purpose of this study is to evaluate and compare the financial performances of companies operating in tourism sector and traded in BIST using the TOPSIS method.Due to the fact that tourism enterprises are affected by global economic, social and political issues, we do not engage in companies that do not operate in the tourism sector.The names of the tourism companies traded in the BIST and their codes are shown in Table 2.The dataset of the study constitutes the financial statements of the tourism companies traded in the BIST for 4 years between 2013-2016.The information used to calculate the financial ratios was derived from the annual financial statements published on official websites of the BIST and Public Disclosure Platform (KAP) (BIST, 2017;KAP, 2017).The 9 generally accepted financial ratios selected from the liquidity, financial structure, activity and profitability ratios and obtained from the financial tables were taken from Public Disclosure Platform (KAP) (kap.gov.tr).They are shown in Table 3.Although studies have been carried out analyzing financial performances of tourism enterprises previously traded in the BIST, the absence of a research study covering the 2013-2016 period increases the importance of our paper.

Financial Ratios (Performance Indicators)
It is aimed to reach a judgment about the economic and financial structure as well as the profitability of the businesses by establishing mathematical relations between the ratio analysis method and the account groups in financial statements.It is possible to calculate multiple ratios from financial statements.However, the aim should be interpretable information.For this reason, the items which have a meaningful relationship are selected and compared with each other.The financial status of the entities is interpreted by comparing the results of previous years or making comparisons with the general standards, as it is common in literature (Çabuk and Lazol, 2011).
Financial ratios used in performance analysis are classified as liquidity ratios, financial ratios, activity ratios and profitability ratios.In this study, liquidity ratios taken into consideration were current ratio and cash ratio.Activity ratios taken into account were stock (inventory) turnover ratio, ownership turnover ratio, sales and cost ratio.Profitability ratios chosen were assets profitability, profitability of equity, profitability and net profit margin.
Liquidity Ratios: They measure the short-term debt solvency of orgnanization; in other words, evaluate the liquidity risk and determine whether the net operating capital is sufficient (Akgüç,1995:346).
Financial Ratios: The ratios used in measuring the short and long term debt repayment power of the resources that constitute the passive part of the enterprise balance sheets are included in this group.Financial ratios As a result of the analysis carried out, it is seen that the firms operating in the sector have different financial performances and the performances of the firms vary between the 2011-2015 period.
Erdal Yılmaz, Tunay Aslan Emerging Markets Journal | P a g e |13 measure the extent of usage of foreign sources in the financing of an enterprise.Financial ratios with another expression; examine the location of the debt of the business in financial structure and its consequences within this structure (Ataman and Hacırüstemoğlu,1999:131).
Activity Ratios: They are used to determine how much investment is made relative to the income generated from assets and how efficiently they are used.It is desired that these ratios are high (Ömürberk and Mercan, 2013).
Profitability Ratios: These ratios show whether the company has earned enough profits and from which elements this profit is generated.It is known that the universally accepted income statement includes various income and expenditure items following a specific order from top to the bottom.The profit of each stage has a different meaning in terms of financial status and performance of the organization (Saraç,2012:21).
The financial ratios and calculation methods used in the analysis of the study are shown in Table 3.According to the information in Table 3; determination of the liquidity status of the business is made by determining the current ratio, cash ratio, the stock transfer ratio (inventory turnover ratio) and the ownership turnover ratip in determining the effective use of the assets of the entity and finally the net profit margin, the profitability ratio of the equity, profitability and net sales ratio.

Data and Methodology
The aim of this study is to analyze the performance of the companies in the tourism sector, which are traded on BIST for 2013-2016, taking into account their financial data.For this reason, the TOPSIS analysis is used to determine the best and worst of the business performances.
The TOPSIS method can be applied directly on data without a qualitative conversion.With this method, it is possible to sort out the ideal solution distances between the maximum and minimum values that can be taken by certain criteria.In TOPSIS analysis, Microsoft Office Excel program was used.The data are obtained from the financial statements on the BIST website.Seven companies listed on BIST with full financial statements between 2013-2016 were included in the study.
There are many criteria-based decision making techniques used in businesses.The TOPSIS method is the most common of all-purpose decision making techniques.The TOPSIS method gives meaningful results when evaluating the operating performance.This method is the most suitable solution for operation based on ideal and negative ideal solutions.Positive ideal solution is an improved method based on the assumption that, the nearest negative ideal solution will be formed from the most far point.OPSIS (Technique for Order Preference by Similarity to Ideal Solution) was developed by Hwang & Yoon (1981) as an alternative to the method of ELECTRE and is the most widely used multi-criteria decision making technique (Kabakçı,2014).This method consists of 6 steps.The following table summarizes these steps.

Table 4: TOPSIS Analysis Application Steps
Step 1: Creating the Decision Matrix Step 2: The Normalized Decision Matrix Creation Step 3: Creation of Weighted Decision Matrix Step 4: Creating Ideal (A +) and Negative Ideal (A) Solutions Step 5: Calculation of separation measures Step 6: Calculation of ideal approximation of solution Step 1: Creating the Decision Matrix (A): The decision matrix contains the decision points to be ranked in the rows and the evaluation factors to be used in decision making in the columns.The decision matrix is shown as follows: In the matrix Aij, m is the number of decision points and n is the number of evaluation factors (Dumanoğlu and Ergün,2010:105).

Evaluation of Performance of Tourism Industry Companies listed in Istanbul Stock Exchange (BIST) by TOPSIS Methodology
Page |14| Emerging Markets Journal    In our example, 7 businesses from decision points and 9 financial ratios from evaluation factors are used.In the first phase of the study, the Standard Decision Matrix was created for the TOPSIS method.Decision matrix for the years 2013-2016 belonging to the enterprises subject to the study are shown in Table 5, Table 6, Table 7 and Table 8.Step 2: The Normalized Decision Matrix (R) Creation The values of rij are calculated using the values in the standard decision matrix with the formula below: In our example; the normalized decision matrices for the years 2013-2016 are calculated and the normalized decision matrix for the year 2013 is shown in Table 9 below.Step 3: Creation of Weighted Decision Matrix (V) In this step, the weight values (wi) related to the evaluation factors are determined, then the elements in each column of the R matrix are multiplied by the corresponding (wi) values to form the V matrix (Aladağ et. al. 2016).The formula for the calculation of the matrix V is shown below: The weights for the evaluation criteria are determined as W1 and W2.The weights to be created are for the normalized decision matrix.The values of columns of the R matrix are multiplied by the corresponding evaluation factor weight values and the columns of the V matrix are calculated.

Results
The tourism companies traded on BIST were examined in this study.The financial performance for the years 2013-2016 was evaluated by the TOPSIS method using the financial statement information.As a result of the evaluation, METUR in 2013 and MALT in 2014, 2015 and 2016 showed the best performances.MALT also showed the second best performance in 2013.METUR has the best performance in 2013, and also it was in the last place because it did not have any sales activity in 2014.METUR showed the second best performance in other years.The poor performers belong to NTTUR in 2013, METUR in 2014, UTPA in 2015 and MARTI in 2016.
When evaluating the financial performances of the enterprises; it is important to compare the performances of the previous year with those of similar qualities in the same sector.In this way, more accurate results can be achieved by evaluating the past and anticipating the future.By the help of TOPSIS multicriteria decision method, the performances of companies operating in the same sector are assessed and the performances are compared.In the following studies, it is possible to obtain more healthy results by comparing the performances of large scale tourism companies which are not traded in BIST, together with their financial statements.

Table 14 : Ideal Solution Relative Affinity Values - Years 2014 and 2016
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